Amazon.com Could Build Android Tablet to Rival iPad 2: Forrester

Amazon.com could build an Android-based tablet computer to challenge Apple's iPad 2, said Forrester Research March 10. The move may be better received than the Motorola Xoom and other tablets from carriers.

If one vendor could challenge Apple's daunting iPad channel and ecosystem, it would be Amazon.com, according to a report from Forrester Research.
Of course, the e-commerce and e-reading giant has to build a tablet first.

Forrester analyst Sarah Rotman Epps said that while the Motorola Xoom, HP TouchPad and RIM Blackberry PlayBook are solid alternatives to the iPad and the soon-to-be-sold iPad 2, those devices are too expensive and can't compete with the Apple Store channel.

Hence, the research firm's prediction that Apple will command 80 percent of the U.S. consumer tablet market through 2011, with the new entrants shaving only 10 percent from Apple's 2010 tablet share after the first iPad sold 15 million units.
Enter Amazon.com as a potential dark horse challenger to the impending iPad hegemony, which is supported by a thriving, but closed ecosystem of tightly controlled hardware, software and applications.
"It would be easy to call the game for Apple as the second inning is starting, but we won't, because we see a market that's ripe for disruption by Amazon in particular," Epps wrote in a blog post March 10.

"Amazon could create a compelling Android- or Linux-based tablet offering easy access to Amazon's storefront (including its forthcoming Android app store) and unique Amazon features like one-click purchasing, Amazon Prime service and its recommendations engine."
Why would Amazon.com undertake such a bold play? Competition. Apple CEO Steve Jobs said at the iPad 2 introduction March 2 that iPad and iPhone users have downloaded more than 100 million iBooks, presenting a serious threat to Amazon.com's Kindle e-books.
Amazon.com could offer users an alternative to the stringent rules Apple has created for e-book sellers and publishers that require in-application payments. This potentially freezes out Amazon, which now has the motivation to create its own tablet.
Amazon.com could also sell a tablet at or below cost, recouping its expenses by selling content. Consumers would have to pay for 3G and 4G data plans.
This model, Epps argued, would be preferable to the model Motorola, Samsung and others are using to sell their tablets via carriers at a subsidized price.
Ultimately, Epps said Amazon.com has the brand; content such as eBooks, MP3s, streaming video and games; and retail channel inventory to make a tablet work.
She's not just guessing either. Epps said a survey revealed that 24 percent of consumers said they would consider purchasing a tablet from Amazon.com, compared with 18 percent who said they would buy one from Motorola.
Moreover, 28 percent of consumers considering buying a tablet would prefer to buy it from an online retailer like Amazon, compared with only 11 percent who say they would buy one from a carrier.
From a branding standpoint, it appears carriers and their notorious data plans are scaring off tablet customers.
Suppose Amazon.com did build a tablet. Android would appear to be the most obvious OS to use. Amazon.com has already created its own application store for Android applications, so it would make sense to offer a branded Android device to run them on.